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Altcoins Soar Whilst Crypto Market Matures

Bitcoin has closed its first decisive week above the 20-week moving average (shown by the higher blue line) and the 21-week EMA (exponential moving average, shown as the lower blue line), which is what many consider to be the bull market support band, for the first time since it was around $57,000. There is also a bullish crossover on the MACD indicator on the weekly time frame (shown below)


Bitcoin / U.S. Dollar - 16th Aug

Even though the trend has flipped bullish, a pullback is to be expected before continuation. This is because there has been declining volume with an increase in price, as well as a bearish divergence in the RSI indicator on the daily time frame (shown by the blue arrows). In addition, there is a rising wedge pattern forming on the daily time frame (shown in black) which has a high probability of breaking to the downside.



Graph showing Crypto growth

The cryptocurrency market is showing signs of maturity, shown by Coinbase’s Q2 earnings report last week. The retail trading volume increased from $11 billion in Q2-2020 to $145 billion in Q2-2021, whereas the institutional trading volume increased from $17 billion in Q2-2020 to $345 billion in Q2-2021. Even though the market is deeply retail driven, this report shows how institutions are beginning to dominate the industry. Furthermore, the company announced a profit of over $1.6 billion which is nearly double the profit of Q1. Analysts’ revenue predictions of $1.88 billion were also exceeded as the company announced a $2 billion revenue for Q2. Over the weekend, the chip giant Intel declared that they own $800,000 of Coinbase stock, which further signals institutional interest in the field.


The private investment firm Neuburger Berman is now adding Bitcoin futures to its $161 million commodity Strategy Fund. A spokesperson for the firm said it is using bitcoin price exposure strategically as a hedge against inflation, as Bitcoin “is scarce by definition.” Other investment firms like Vaneck and Invesco have sought out exposure to Bitcoin via futures rather than holding the underlying asset – these companies filed for Bitcoin futures ETFs.


On Friday, HIVE blockchain, which are a Canadian crypto-mining company, announced they have ordered 1,800 new Bitcoin miners. They currently hold 875 BTC and keep 100% of the Bitcoin they mine using renewable energy. For firms like HIVE blockchain, China’s recent ban on bitcoin mining has been a great opportunity to double down on mining equipment purchases. Machines have been geographically redistributed out of China. The China ban has allowed North American miners specifically to benefit, as they have enjoyed a lower difficulty to mine and hence HODL more Bitcoin. In July, North American Bitcoin miners have enjoyed a bigger bitcoin production without meaningful increases in hash rate capacity. Five publicly listed firms mined a combined total of 1,802 $BTC that month, a 58% average increase over June.


Public North American Miners Bitcoin Production July 2021

Elon Musk reiterated his admiration for DOGE on Saturday. Mark Cuban declared that Dogecoin is the “strongest” cryptocurrency for paying for goods and services, to which Musk replied, “I have been saying this all along”. Dogecoin is reaching the spotlight in the Premier League, as Watford FC will feature the cryptocurrency as its sleeve sponsor for the 2021/2022 season.

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